Myanmar tourism takes off

BANGKOK, 30 May 2012: Association of Thai Travel Agents said Myanmar is now emerging as a serious competitor after opening its doors to investment and political reform.

ATTA president, Sisdivachr Cheewaratanaporn, warned on Tuesday that over the next three to five years, Myanmar will be very competitive far more than Vietnam and will pose a serious challenge to Thailand’s travel industry if it does not adapt.

“There is pent up interest to visit the country after years of isolation,” he said. Myanmar will attract tourists for a mix of reasons including curiosity to a serious interest in its heritage and cultural assets.”

He suggested that Thailand’s tour operators had to find ways to combine tours with Mayanmar and strengthen Thailand’s role as a gateway destination.

“Thai operators should find partners and invest in the tourism business to add value to current tours that focus only on Thailand.”

Mr Sisdivachr added: “Over the next three to five years Myanmar would start compete head-on with Thailand, as many European airlines are planning to launch direct flights. This means that tourists will be lost because Thailand will no longer be the the sole gateway to Myanmar.

The Union of Myanmar Travel Association chairperson, Maung Maung Swe, said tourism and hotel business in Myanmar had improved and would grow further as more investment flows into the country.

“Myanmar also has the competitive advantage of being rich in natural resources and having a strong cultural heritage, which will boost tourism.”

Hotel companies from Thailand have invested US$263.25 million (Bt8.3 billion) in Myanmar, in properties that offer 1,896 rooms in 11 hotel brands, including Andaman Club, Kandawgyi Palace, Nikko (Chatrium), Mandalay Hill and Pearl Laguna.

Investments from Singapore are the highest in the hotel industry at about US$597 million, followed by Thailand, Japan with US$183 million, Hong Kong with US$77 million, Malaysia with US$20 million and Britain with US$3.4 million.

In terms of investment from Thailand, the power sector ranked the highest with about US$6 billion, followed by oil and gas at US$2.19 billion, manufacturing at US$630.84 million and the hotel and tourism industry.

After recent political changes,  Myanmar’s new government has been making  attempting to reform existing investment legislation to promote the tourism industry.

This includes a land-lease law that may be extended to 70 years, starting off at 50 years and then offering two extensions of 10 years each. The existing law allows a lease of 60 years, starting at 30 years and then two renewals of 15 years each.

In terms of hotel investment, the association will also propose that the government protect local operators. For example, foreign investors should not be allowed to invest in one- and two-star hotels.

However, they could work in  joint ventures with locals to build three-star hotels or invest fully in four- and five-star hotels.

“This way local operator can learn more about business practices from foreign operators,” he said.

Myanmar currently has six domestic airlines and  airports in Yangon, Nay Pyi Taw and Mandalay.

It also has 759 licensed tour companies, of which one is wholly foreign owned, 15 are joint ventures and 743 are local firms.

At present, there are 16 international airlines flying to the country – 15 to Yangon and one to Mandalay.

Last year, Myanmar posted US$319 million in tourism revenue, up 25.60% from US$254 million in 2010. Average spending per head per day was US$120 last year, with an average length of stay of eight days.

There were 816,369 foreign arrivals last year, up 3.14% from 791,505 in 2010. Of the total last year, 425,193 were border tourists.

From April last year to this March, 64,267 Thais visited Myanmar increasing 7.66% compared to 59,692 during the same period in the previous year.